A new report from RiskMetrics Group, a financial research firm, warns investors that some leading oil sands companies may be particularly exposed to financial risk from toxic waste water liabilities.
The report attempts to quantify the true cost of cleaning up billions of barrels of contaminated water resulting from the mining and refining operations of leading producers of oil sands crude. It was quietly released in December to RiskMetrics' private clients, and unveiled more publicly last week in a conference call. Titled "Oil Sands Tailings Pond Remediation Costs Understated," the report shows a handful of companies to be at a financial disadvantage because of their exposure to waste water remediation liabilities.
For example, for Suncor, currently the largest producer in the oil sands, water remediation could cost almost $2 million a week, or $104 million a year, according to RiskMetrics. That would erode the company's annual net income by 26 percent according to RiskMetrics' low-cost analysis. In the worst case, RiskMetrics says, the cost of cleaning up toxic waste water could completely wipe out Suncor's earnings.
With Royal Dutch Shell announcing Monday that it would scale back the pace at which it develops projects in the oil sands of Alberta, discussion has revolved around whether this decision is more a product of environmental pressure or economic realism — or both — and what this means for the industry's involvement in environmentally and economically costly projects more broadly.
Peter Voser, CEO of Shell, told the Financial Times in London that unconventional resources such as the oil sands will be "developed but at a much slower pace."
Strange, isn’t it that media are not wondering about who hacked into the computers and who paid them? Or why Dr. Andrew Weaver’s office in Victoria has been broken into twice. My guess is that all the computers of all the climate research centers of the world have been repeatedly attacked, but defenses held everywhere but East Anglia.
The scientists at East Anglia, plus colleagues around the world, are being hung out to dry as though they did something wrong. I did not want to spring to their defense until I read all their emails. Yes, all 3,000 or whatever of them.
Starting from 1996, these good and decent scientists write to each other on e-mail as colleagues and often as co-authors of work in paleoclimatology.
Alberta’s sprawling tar sands region holds the second largest oil reserve in the world after Saudi Arabia, but investors lured by the promise of black gold should think twice about the environmental risks, a Canadian investment fund warns.
In a new report, Northwest & Ethical Investments LP describes how companies operating in the tar sands — including global giants BP, Shell and Total — are exposed to “litigious, regulatory, policy and social license risks,” and its says some of those companies are doing a poor job of disclosing that risk exposure to shareholders.
“As more companies enter the oil sands, and the contribution of oil sands to company reserves increases, more investors are becoming exposed to these risks, and the level of their exposure is increasing,” the report says.
For years the promise of North America's first offshore wind farm has been just that – a promise. The reality has been a big disappointment: proposals pigeonholed by Bush-era dirty energy policies and NIMBY (not-in-my-backyard) opposition.
The Cape Wind project off Nantucket Sound was to be the continent's first offshore wind park. Eight years on, it remains in limbo. The latest hiccup? Two Indian tribes are trying to block the turbines by getting Nantucket Sound listed as a "traditional cultural property." In other words, more delay is on the way.
But the Massachusetts wind farm is no longer the only offshore game in town. With a pro-renewable energy administration in Washington, increasing state and provincial clean energy standards and coming carbon regulations, a big push is underway that could make North America the next big market for offshore wind generation.
The race is on. And for now Ontario, Canada, is in the driver's seat.
Canadian Prime Minister Stephen Harper is getting a chilly reception from environmental groups as he heads to the White House today to talk energy with President Obama.
An online ad campaign showing Harper in a cowboy hat suggests the prime minister is trying to undermine U.S. climate change legislation to protect the tar sands.
"As elected leader, he helped keep America addicted to oil," the environmental groups' ad reads. "Now he's pushing big oil's latest trick.”
Activists have been putting that message into 3D this week, starting on a bridge at Niagara Falls, where six Rainforest Action Network climbers hung a giant banner with arrows pointing to a “Clean Energy Future” south of the border and “Tar Sands Oil” pointing the way back to Canada.
Greenpeace went after the oil operations themselves. Two dozen activists snuck in amid the bitumen and giant machinery of a Shell tar sands operation in Alberta and chained themselves to a three-story dump truck and a hydraulic shovel.
Their message: Ripping up the boreal forest to extract some of the most carbon intensive oil on the planet is a climate crime.
As the global economic crisis has made all too clear, there is one choke point for almost any business: its source of financing.
Rainforest Action Network activists were thinking about that this morning as they hung a banner outside the Toronto offices of RBC, Canada’s largest bank and the nation’s biggest financier of efforts to extract oil from the Alberta tar sands.
The banner had its own unusual pressure point: It called on Janet Nixon, wife of CEO Gordon Nixon and a known environmental supporter, to persuade her husband to stop RBC’s financial support of the energy-intensive tar sands.
In a personal video plea to Janet Nixon at the Web site PleaseHelpUsMrsNixon, RAN Executive Director Mike Brune says:
“Your husband can make history. RBC can lead Canada towards a clean energy future, and you’re our best hope, Janet.”
Tar sands extraction and production are a significant source of greenhouse gas emissions, producing two to three times the greenhouse gases of conventional oil, polluting water supplies, and making it difficult for Canada to meet its climate commitments.
RAN sees a better way to power North America, but to get the Shells and Suncors of the world to move on to clean energy, it needs to turn off the funding taps for the tar sands.
Where the natural gas from the Alaska Natural Gas Pipeline will end up is a murky question tied up in a 30-year-old treaty, expansion of Canadian tar sands operations, and trends in natural gas supplies both in the United States and in Canada.
Environmentalists fear at least half of the relatively clean-burning Alaskan North Slope gas will end up fueling tar sands operations in Alberta, where the pipeline will end, instead of coming to the lower 48 states to replace carbon-intensive coal in power plants. The tar sands operations already consume about 20 percent of Canada’s natural gas, and they are expected to need as much as twice that by 2035.
Michael Brune of the Rainforest Action Network calls the pipeline "a stealth dirty oil mega-project … conceived by Big Oil.”
“Under Plan Palin, ExxonMobil and TransCanada would construct a 1700-mile natural gas pipeline from the Arctic, heading south,” Brune writes. “About half of it is likely to be siphoned to help produce the dirtiest oil on earth.”
Canada's Conservative government is funneling two-thirds of its $860 million "clean energy" fund into carbon capture and storage (CCS) technology. Most of that $580 million is headed to Alberta to clean up the province's dirty tar sands operations, which emit more global warming gases than the entire nation of New Zealand.
If it sounds like hogwash, or rather greenwash, it is.
The tarry bitumen of the oil sands is one of the world's filthiest hydrocarbons. Mining it produces two to six times more greenhouse gases than light oil.
In theory, CCS, or so-called "clean coal," could strip carbon from exhaust gases, pipe it away and bury it in depleted oil and gas reservoirs elsewhere in Alberta. But that doesn't hold up in practice, and there's no evidence that it ever will.
Canada has said it will set a single "tough" tailpipe emission standard that will apply to 2011 model cars and light trucks. It will be identical to the federal corporate average fleet fuel economy (CAFE) standard announced by President Obama on March 27.
Canadian automakers welcomed the government's plan, which is your first sign that it must be flawed. Why are they pleased? Consider these two reasons:
(1) The Obama administration's interim standard for 2011 is weak -- even weaker than the standard proposed by President Bush last year.
(2) Canada's "single," "mandatory" standard will preempt provinces from adopting the more stringent limits of the California standard, to which four provinces have already committed.
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